Slavery and Human Trafficking Statement Kawasaki Precision Machinery (UK) Limited for the year ending 31 December 2016
Introduction Modern slavery affects over 29 million people around the world, according to the Walk Free Global Slavery Index 2013. The uniting characteristic of all forms of modern slavery is that it involves one person depriving another person of their freedom: To leave one job for another To leave one workplace for another or To control their own body. There are a variety of terms used to describe modern slavery, however for the purpose of this statement KPM UK have chosen to use the following: Human trafficking Forced labour Slavery The Modern Slavery Act, the first of its kind in Europe, received Royal Assent on the 26 th March 2015. The act consolidates slavery and trafficking offences and introduces tougher penalties and sentencing rules. Board approval Under the UK s Modern Slavery Act 2015, KPMUK is required to publish a Slavery and Human Trafficking This statement has been approved by: Statement for each financial year, describing what steps we have taken to address the risk of slavery or KAWASAKI PRECISION MACHINERY (UK) LIMITED s Board human trafficking occurring in our own operations or our supply chains. of Directors, who will review and update it annually. The following document is KPMUK s first such annual statement, covering Kawasaki Precision Machinery [Director's/Designated member's/partner's] signature: (UK) Limited for the year ending 31 December 2016. This statement sets out KPMUK s actions to understand [.] all potential modern slavery and human trafficking risks related to our business and to put in place steps [Director's/Designated member's/partner's] name: that are aimed at ensuring that there is no slavery or human trafficking in our own business and our supply [. ] chain. This statement relates to actions and activities during the financial year 1 January 2016 to 31 [Director's/Designated member's/partner's] position: December 2016. [..] Kawasaki Precision Machinery (UK) Ltd (KPM(UK)) is committed to maintaining and improving systems and Date:... processes to avoid complicity in human rights violations related to our own operations, our supply chain, and our products. We realise that slavery and human trafficking can occur in many forms, such as forced labour, child labour, domestic servitude, sex trafficking, and workplace abuse. KPM (UK) recognises that it has a responsibility to take a robust approach to human rights violations and is absolutely committed to preventing such violations in its corporate activities, and to ensuring that its supply chains are free from slavery and human trafficking. Signature: Position: Managing Director Date: 05/01/17 2
Forward Contents Our Supply Chain Assessment of Risks of Slavery and Human Trafficking in our Supply Chain Responding to the Modern Slavery Act Our Approach Employee Charter Supplier Audits Our Polices and Procedures Relevant Polices in Relation to Slavery and Human Trafficking Recruitment and selection policy Recruitment of Temporary Staff Policy Dignity at work policy Worker s representation Whistleblowing policy Training on Slavery and Human Trafficking Awareness-raising programme Evolving Approach to Slavery and Human Trafficking Risk in the Supply Chain Page 4 Page 5 Page 5 Page 6 Page 7 Page 7 Page 8 Page 9 Page 10 Our Business Today, the Kawasaki brand is synonymous with quality and innovation, leading the way in hydraulic components and systems design and manufacture and supply equipment for a huge range of applications in the industrial, agricultural, construction and marine markets. Our Structure The Precision Machinery division of Kawasaki Heavy Industries has been at the forefront of hydraulic technology and development for nearly 100 years and our products can be found around the world on land and at sea. Precision Machinery Division has manufacturing facilities in Japan, China, Korea, India and the UK. Located in Plymouth in the South West of England KPM (UK) is the centre for Sales, Engineering, Manufacturing and Customer Support for Customers in Europe, USA, Asia, Middle East and Africa. Our customer base is predominantly Original Equipment Manufacturers in the marine, construction and agriculture industries and we are supported by a global sales distribution and support network. Around 90% of our Customer and distribution base is located in the UK, Europe, Japan, North America and Asia. Our current number of staff working for KPM (UK) is approximately: 242 KPM UK Is a Global Distributor of the Staffa Motor Supplying materials across the Globe Operating the UK 83 Product Suppliers 3
Our Supply chain Our Supply Chain KPM (UK) sources goods and services directly from a global network of approximately 83 direct product suppliers and 526 indirect suppliers. Around 90% of KPMUK s direct supply base is located in the UK and Europe and we also utilise our Japanese parent company to supply factored and subassembly parts to meet our production requirements. 15 Our supply chain is made up of both manufacturers and distributors pre-dominantly supplying raw material, preassembled product as well as component parts. We believe that our exposure to the risks of modern slavery is low within our own business and within our supply chain. However, this assessment will be kept under review and if circumstances change we will have no hesitation in instituting additional actions. KPM (UK) actively manages its relationships with its suppliers. There are clear contractual arrangements in place with our direct suppliers who are required to comply with our Standard Terms and Conditions for the Purchase of Goods and Services. These Terms and Conditions are under periodic review to ensure they remain relevant with current legislation. Communication of the standards expected of our suppliers are done through a variety of mechanisms including direct buyer interaction, regular business reviews and via email notices to suppliers. 4
Assessment Assessment of Risk of Slavery and Human Trafficking in our Supply Chain We have undertaken an exercise to assess slavery and human trafficking risks within our supply chain. We have carried out an evaluation based on the countries where our suppliers are based, products and services being supplied and the volume of spend. The data was evaluated against recognised external sources on perceived slavery risk within sectors and geographic areas to assess whether suppliers potentially represented a higher slavery risk. From our risk assessment work to date, considering the type of commodity or service being provided and the country in which the suppliers are based, we have identified 2 suppliers that may potentially present an elevated risk of slavery or human trafficking. These suppliers are based in 2 countries, Turkey and Taiwan. We are currently seeking further information to understand how these suppliers protect human rights within their operations. There are also a number of people working on our site as employees of companies providing outsourced services such as cleaning, catering and waste management. The nature of these services may mean there is an increased inherent risk of slavery and human trafficking. The companies that provide these services are subject to our Standard Terms and Conditions and we intend to seek additional assurances from these companies that they have effective procedures to protect their staff from such human rights violation risks. KPMUK s risk register is reviewed by the Senior Leadership Team on a monthly basis and any issues identified are then appropriately dealt with. Responding to the Modern Slavery Act - Our Approach As an international company, we are committed to conducting our dealings, whether with customers, suppliers, employees or the communities in which they are based, with the utmost integrity. Although we believe that our exposure to the risks of modern slavery is low, we are not complacent. We understand that, if we are to be successful in delivering our strategy for growth, then we must make sure that we interact with our employees, customers, suppliers and others effectively and properly. 5
Employee Charter Employee charter During our financial year ending December 2016 we are rolling out a programme called TOP BRAND which aligns with our KPM (UK) Ltd Strategic Statement and establishes a set of principles that outline the behaviours that we expect from all our people within our business. Our Vision is Delivering Top Brand which is the Brand of choice for our Stakeholders, KPMUK s Employee Charter underpins our strategic vision and makes clear to employees the actions and behaviour expected of them when working for KPM (UK). We strive to maintain the highest standards of employee conduct and ethical behaviour whether operating abroad or in the UK and when managing our supply chain. The fundamental principles by which we are guided is through our 5 key Values of Plan, Learn, Empower, Respect and Commit. Not only do we have high expectations for our employees, but these are extended to our suppliers, who are expected to subscribe to and adopt similar standards. In light of the introduction of the Modern Slavery Act 2015, we are in the process of creating a Supplier Code of Conduct which will require suppliers in our supply chain to comply with these principles. KPM (UK) will expect all suppliers to hold their suppliers and subcontractors to the standards and practices covered by our Supplier Code of Conduct. Here are some of the key areas we are focussed on: Health and safety in production areas and any living quarters. The right to legal wages and benefits. Appropriate working hours and overtime pay. Prevention of child labour or forced labour. Fair and ethical treatment, including nondiscrimination. Respect for the environment. In order to consolidate this ethical position, KPM (UK) will require our suppliers to sign up to our Supplier Code of Conduct. If we became aware of slavery or human trafficking concerns within our supply chain, we would seek to work with the relevant supplier to improve conditions for their workforce. However, we would reserve the right to terminate our relationship with any supplier if they fail to make the required improvements within a reasonable timeframe, or that violates the Code or does not cooperate with our auditors. To date, KPM (UK) is not aware of any reports of slavery or human trafficking within our supply chain. 6
Supply Audits Supplier Audits Our Policies and Procedures When working with our KPM (UK) supply chain, we use industry recognised standards to audit suppliers and verify compliance. We audit direct product suppliers periodically to monitor continued compliance and improvement. As part of this, we are deploying a supplier audit programme which we are planning to enhance to facilitate our ability to verify that our suppliers do indeed adopt similar standards of ethical behaviour. Once this programme is fully functional, we will be in a position to confirm that our suppliers have all committed to us that they comply with all applicable regulations on ethics and human rights and that they will conduct business to the highest standards of honesty and integrity. KPM (UK) recognises that it is not enough simply to state our commitment to an ethical approach. The business is required to have clear, proportionate procedures designed to ensure that the business done on its behalf is conducted ethically and honestly. Our Company Handbook, which is given to every employee on their appointment to KPM (UK) provides reference and guidance to all our employees. Before participating in any business interactions, KPM (UK) requires an appropriate level of due diligence on that counterparty to be carried out. Due diligence is undertaken when considering taking on new direct product suppliers, as well as regular reviews of our existing supply base. Under our Standard Terms and Conditions we have the right to conduct audits of suppliers and / or ask suppliers to submit to third party assessments. 7
Relevant Policies in Relation to Slavery and Human Trafficking: Recruitment and selection policy Recruitment of Temporary Staff Policy Dignity at work policy Worker s representation Whistleblowing policy KPM (UK) is committed to all of its employment practices being fair, compliant with current legislation and reflecting best business practice. The purpose of this policy is to assist the Company in finding the best and most talented individuals to fill its vacancies in a timely and efficient manner. This policy sets out the process and rationale for recruitment and selection at KPM (UK), illustrating how resourcing is managed fairly and consistently throughout the business, ensuring that these practices are lawful, balanced and impartial. KPM (UK) uses only specified, reputable employment agencies to source labour and always verifies the practices of any new agency it is using before accepting workers from that agency. Temporary staff are recruited on the basis of their skills, qualifications, experience, potential and motivation, regardless of gender, race, ethnic origin, sexuality, religion, marital status, age or disability. KPM (UK) is committed to providing a working environment that ensures that all employees are treated fairly, equally and decently, we believe that everyone has the right to be treated with dignity and respect. Harassment or bullying can cause fear, stress, anxiety and it can, therefore, affect job satisfaction and an individual s morale. We regard any form of harassment and bullying as totally unacceptable behaviour and we will not permit it or condone it in any form. Everyone has a personal responsibility for their own behaviour and a duty of care to treat each other with dignity and respect. This includes individuals being aware of the appropriateness of their conduct, making sure that their own behaviour does not cause offence or misunderstanding. Furthermore if any employee is witness to conduct which contravenes the Dignity at Work policy it is their responsibility to report this to their manager. KPM (UK) recognises and respects each employees right to freedom of association and actively engage with employees through our Staff and Works Committees. KPM (UK) encourages all its workers, customers and other business partners to report any concerns related to the direct activities, or the supply chains of, KPM (UK). This includes any circumstances that may give rise to an enhanced risk of slavery or human trafficking. KPMUK s whistleblowing procedure is designed to make it easy for workers to make disclosures, without fear of retaliation. All KPM (UK) employees wherever they work in the world are encouraged to see that protecting KPMUKs integrity is their responsibility and have access to a reporting process so that they can raise any concerns they may have. All disclosures are referred to KPM (UK) HR Department who then passes the report to a senior executive at KPM (UK) for investigation. All disclosures are treated in confidence and no one is adversely treated for making a report. 8
Training Training on Slavery and Human Trafficking So that the procedures are properly understood and applied, KPM (UK) recognises that it must ensure that it has given its employees the right training KPM (UK) carries out continuous relevant job specific training for all its employees. In addition, the business will be identifying those departments where ethical compliance is particularly relevant (for example, Senior Management, Human Resources, Sales and Procurement) where there is a greater likelihood for these employees to be exposed to ethical issues. KPM (UK) will require all staff directly involved with the Supply Chain and HR to complete training on modern slavery. KPMUK s modern slavery training is yet to be defined, but will cover areas such as: Our business's purchasing practices, which influence supply chain conditions and which should therefore be designed to prevent purchases at unrealistically low prices, the use of labour engaged on unrealistically low wages or wages below a country's national minimum wage, or the provision of products by an unrealistic deadline; How to assess the risk of slavery and human trafficking in relation to various aspects of the business, including resources and support available; How to identify the signs of slavery and human trafficking; What initial steps should be taken if slavery or human trafficking is suspected; How to escalate potential slavery or human trafficking issues to the relevant parties within the organisation; What messages, business incentives or guidance can be given to suppliers and other business partners and contractors to implement antislavery policies; and What steps the organisation should take if suppliers or contractors do not implement antislavery policies in high-risk scenarios, including their removal from the organisation's supply chains. 9
Evolving Approach Evolving Approach to Slavery and Human Trafficking Risk in the Supply Chain Awareness-raising programme As well as training staff, the organisation will be raising awareness of modern slavery issues by circulating an email to draw attention on this statement and explaining: the basic principles of the Modern Slavery Act 2015; how we can identify and prevent slavery and human trafficking; what we can do to flag up potential slavery or human trafficking issues to the relevant parties within KPM (UK); and what external help is available, for example through the Modern Slavery Helpline. As our programme progresses, we will prioritise potentially higher risk suppliers for the mitigation measures we implement. These may include: seeking to obtain more reliable and granular data, by investigating our labour practices, and those of our suppliers, to ensure no slavery or force labour are present in the organisation or by any of our suppliers. a detailed review of existing supplier information; supplier self-assessment questionnaires declarations and audits of selected suppliers. actively engaging with all existing and new suppliers to sign up to our Supplier Code of Conduct As our knowledge and understanding increases, we will put in place all the necessary processes, procedures, investigations and compliance systems to support ethical procurement and best business practices. 10